+BUSA2106Lecture 7Outline of Last Lecture I. Pretrial processII. Trial III. AppealOutline of Current Lecture IV. Alternative Dispute ResolutionCurrent Lecture: Litigation is… 1. Expensive 2. Slow 3. Stressful 4. Public • How might a dispute be resolved out of court? Alternative dispute resolution (ADR) • Why ADR? – Cost – Flexibility – Speed – Privacy • Why not ADR? – Privacy – Limited opportunity to appeal Alternative Dispute Resolution (ADR) • Goal: settle a dispute without litigation (or without proceeding all the way through the litigation process)• Types:a. Negotiation b. Mediation c. Arbitration Negotiation •What are some differences between the three forms of ADR? • Parties attempt to settle disputes themselves, with or without attorneys • Simple • Informal • Low-cost • More than 90% of corporate lawsuits are resolved before trial Mediation • Neutral third party (the mediator) actively works with both sides • Mediator may propose a solution but does not make a decision resolving the matter • Some states require mediation before litigation. • More formal • Higher cost Arbitration • Third party makes the decision • Like a trial • Can be binding or nonbinding • Decision is final; only limited appeal rights • More formal • More expensive Arbitration clauses • Terms written into contracts requiring that disputes go to arbitration rather than to court. • Generally enforceable as long as the signing party actually consented to
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